31 May Florida Personal Property Exemption Increased to $4000
The following information is vital for Florida bankruptcy lawyers and non-homeowners on the verge of filing Chapter 7 bankruptcy in Florida.
The Florida legislature recently passed bill CS/SB 2118, which amends Florida Statutes Section 222.25, to increase to $4,000 from $1,000 the amount of personal property exempt from creditor claims, provided that the debtor does not receive the homestead exemption under Florida’s Constitution. The exemption for persons with homestead property will remain at $1,000 as provided in the Florida Constitution Article X, Section 4(a)(2). An argument can be made that the new exemption for non-homeownersis in addition to the $1,000 exemption available to all residents. That would bring the total exemption to $5,000 for an individual or $10,000 for a couple. However, the bill provides that this exemption does not apply to debts for child or spousal support.
The question is whether the legislature went far enough. The $1,000 exemption from creditor claims was carried over from the Florida Constitution of 1868. According to the Office of Economic and Demographic Research, $1,000 in 1868 is approximately $15,000 today.
Nevertheless, the impact of this amendment cannot be overstated. It means that many more Florida debtors will be able to keep all of their assets in bankruptcy. Additionally, it means that bankruptcy attorneys must pay particular attention to whether a potential debtor is on the deed to his or her home, and it may prompt a bankruptcy lawyer, in certain circumstances, to recommend a potential debtor file bankruptcy individually rather than jointly with his or her spouse.
The new legislation is expected to be signed by Governor Charlie Crist and will become effective July 1, 2007.
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